Brembo thrives on growing performance market

Brembo, the Italian brake manufacturer, is on a roll. The company's global 2014 revenue grew 15 percent to $2.19 billion. More than a quarter of those sales came from North America, Brembo's largest region.

But Brembo, like other suppliers, has plenty of challenges. The company wants to hire more engineers, and automakers are demanding lighter-weight parts. This year, the company will begin construction of a $100 million foundry in Homer, Mich.

A: It starts with our racing heritage. We've been racing for 40 years. That's a DNA that all of us, when you are hired, are injected with. At the end of the day, a lot of that [racing] technology moves down into the OEM realms. Take aluminum calipers. You didn't see aluminum used even 20 years ago and now it is becoming more prevalent.

Is Brembo on nearly all performance vehicles?

We are on a lot of the high-performance cars. I had a CEO who used to say: "I want our fair share, 100 percent." I always want to be on as many cars as we can get on.

Are Brembo calipers always branded?

It's really OEM specific. Some OEMs put Brembo on the brake and some put the name of the vehicle. Land Rover, for example, had Range Rover on the caliper. They now have Brembo on the calipers. It's really a marketing decision.

Would Brembo brakes ever be used on a budget car? Would that dilute the brand?

Books have been written on brand dilution. You have to define what a budget car is. There are a lot of what I would call lower-priced economy cars with performance versions. If you take a small car like that and soup it up and add turbos and horsepower and start tuning the car, pretty soon you have a car that probably needs a stronger brake system than the car was originally fitted with. So, they'll take a Brembo brake that will fit the packaging but is high-performance oriented.

Ford CEO Mark Fields said in January at the Detroit auto show that performance car sales have grown 70 percent globally since 2012, and he predicted the trend will continue. Does Brembo agree?

We do. We think the OEs, in general, are doing a great job right now working on product rather than product cost. For years, they spent a lot of time focusing on, "What's this going to cost? What's that going to cost?" Now I think there is sort of a different attitude. In order to sell cars, you need to improve the driving experience. You need to make the car something that people want to get into and drive, make it more exciting.

Will Brembo grow organically or will it buy other businesses?

We're doing a good job of growing organically. The North American division of Brembo is now the largest division, and that's happened over the last five years. It's a great time right now to look at other companies, and we're going to continue to look at companies that fit in our portfolio. We might do something, but really nothing I can talk about right now and nothing special that we are looking at.

Why build a foundry in the United States?

Brembo is a company that traditionally has vertically integrated all of its processes. There is a lot of technology that we have patents for. We have a lot of proprietary process technology. When Brembo entered the United States, there was plenty of foundry capacity at that time, before the '08, '09 time frame. Before that, we didn't have the sales to support a full foundry. No one wants to operate a foundry half empty. We like our supply base here in the United States, but the foundry business has been a consolidating business over the past 20 to 30 years. We're growing. And those are two opposing forces we had to find some solution for.

Will the ZF-TRW merger impact Brembo?

Not really. We're interested to see what ZF decides to do with the brake business. Is it really part of their core business or not? There has been some consolidation in the brake business.

What does Brembo make beyond calipers and rotors?

In the motorcycle business, we get into master cylinders and some of the integrating cables and components in the brake system. We also do some motorcycle wheels. Our Sabelt organization makes a lot of safety components, safety belts, carbon fiber seats, racing suits.

Is there a role for Brembo in automotive master cylinders?

The braking system is going to become more and more electronic. It's an area where any brake manufacturer has to be into. And we are doing some work in that area.

Are automakers bringing in Brembo earlier in vehicle development?

We really do see a collaborative spirit from all the OEs. It's refreshing. The earlier we can get into a program, we feel, the better. It gives us more time to understand what they are doing. There are still a lot of changes of philosophy. If you listen to all the CEOs, they say we need to be better at development and stop the last-minute changes.